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Legal Environment of Business Memorandum

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Department of Legal Studies
LGLS 1101: Legal Environment of Business
Fall 2021
Common Assignment
DUE DATE: Friday, December 3, 2021—10 minutes before class start; submit through “Assignments”
section of Canvas.
Length: 2 ½ – 3 pages
Format: Double spaced / 12 pt. font / 1-inch margins—Word format only
Please note: This is not a research assignment where you need to use external sources. You only need to use
the sources listed below in order to complete this Common Assignment. Please note that Turnitin will flag any
external sources used as part of a submitted answer, and your grade will be adversely affected (because that may
be plagiarism).
1. Crash Proof Retirement v. Price – Case 2:20 cv – 05906 E.D. Pennsylvania, 4/13/2021.
This case appears on pages 2 -5 below.
2. Course textbook:
Chapter 3: Ethics, pages 49 – 51
Chapter 6: Tort Law, pages 115 – 118
3. The hypothetical immediately below.
You are a compliance executive at a professional services firm. The client, Hart, is a young entrepreneur
who has created a series of videos and power point slides on YouTube, and he presents these videos as a
roadmap for undergraduates on how to succeed in college. He provides advice on time management,
notetaking, outlining, active listening and strategies on writing papers and test taking. He markets these
videos as Hart’s Helpful Hints to Undergraduate Success (HHH) with additional teaser videos to entice
potential subscribers to pay for access to a password protected site. Within a year, business was
good. Hart earned revenue from the cost of the subscriptions and the sponsors who paid to advertise on
Hart’s website.
Eventually, Kingsfield, a retired professor, issued highly critical critiques of HHH on YouTube and social
media. In the few months following his criticism, subscriptions and advertising revenue tapered off fairly
significantly. Hart is convinced the revenue losses are due to Kingsfield’s actions.
You have been instructed to determine if the client Hart can be successful in a Lanham Act claim against
Kingsfield. Assume Crash Proof Retirement v. Price is precedent in your jurisdiction.
1. Brief Crash Proof Retirement v. Price utilizing the method provided during class. The
general form appears under “Week 2—4. Homework Assignment” under “Briefing Method.”
(Do not use the method discussed in the Text or any other briefing method!) Provide a
complete brief (not a skeleton brief). Include: Case caption (name & citation), Facts, Issue,
Proc. Hist., Holding, and Rationale (approximately ½ to ¾ page.)
This is the 1st page of your submission.
2. Based on the Crash Proof Retirement court’s reasoning, compose a one-page memo (max.)
to the client Hart analyzing his chances of success in proving that Kingsfield violated the
Lanham Act. Be certain to explain in your response whether the three factors that courts
consider in deciding whether speech is commercial are met here.
This starts on the 2nd page of your submission.
3. Can Kingfield’s critiques of HHH on YouTube be justified under a duty-based ethics theory?
If so, how? If not, why not? Be sure to define the specific duty-based ethics theory you use
in your response.
This is the last paragraph of your submission.
Please review the Canvas rubric for further guidance on how this assignment will be graded.
Case No. 2:20-cv-05906-JDW
Wolson, J.
If free speech means anything, it means that you do not get to sue people because you don’t like
their opinion of you. In the immortal words of Taylor Swift, although “haters gonna hate, hate,
hate . . . ” sometimes you just have to “shake it off.” Taylor Swift, Shake It Off, MXM (2014).
“Shake it off,” however, Crash Proof Retirement did not. Instead, it sued Paul M. Price, claiming,
among other things, that Mr. Price violated the Lanham Act by authoring an article that criticized
Crash Proof’s investment strategy. But the Lanham Act does not regulate critical speech. It
regulates commercial speech, which Mr. Price’s article is not. The Court will therefore grant Mr.
Price’s motion to dismiss.
Crash Proof offers retirement planning counseling. It “provides its clients with retirement peace of
mind without regard to the stock market fluctuation . . .” Mr. Price, a former stockbroker, retired
from Merrill Lynch “in October 2000, but continues to write and give investment seminary. On
October 28, 2020, TheStreet published an article by Mr. Price titled, “If It Sounds Too Good to be
True, It Will Probably Cost You.”
Mr. Price spends about half of the article criticizing Crash Proof and questioning how it could offer
a risk-free investment opportunity with a 5% to 8% interest rates with “no fees whatsoever.” ….
Mr. Price expresses doubt about Crash Proof’s promises, noting that “if you believe Crash Proof’s
claims, there’s a bridge in Brooklyn I’d like to sell to you.” Mr. Price challenges Crash Proof’s
claims “that there are no fees attached to [its] services” because “[w]ho do you know who works
for free?” He speculates “that Crash Proof was taking a huge cut of the principal for themselves
right off the top.” In short, Mr. Price calls Crash Proof a scam that preys on desperate people who
plunge “huge pieces of their life savings into products with no chance of success.”
In the second half of the article, Mr. Price describes an alternative investment strategy for those
who “seek reasonable total returns while accepting a very small degree of risk. . .” The investment
strategy that Mr. Price proposes does not refer to any specific product. It is, in Crash Proof’s words,
“an unoriginal, oft-written about, stock-based investment strategy of owning blue-chip stocks
while selling in-the-money call options. . .”
After learning of the article, Crash Proof had to “address the serious implications of having such
false, disparaging and unfair statements made to the public. . .” So, it filed this case, asserting
statutory claims against Mr. Price for violations of the Lanham Act and the Pennsylvania Unfair
Competition statute, as well as common law claims for commercial disparagement and tortious
interference with business relations.
The Lanham Act Claims
The Lanham Act “creates two distinct bases of liability: false association, . . . and false advertising.
. .” Although the “two provisions have separate . . . substantive rules and applicability,”… “[e]very
circuit court of appeals to address the scope of these provisions has held that they apply only to
commercial speech.” Because commercial speech “occupies a subordinate position in the scale of
First Amendment values,” the Act’s focus on commercial speech ensures that it does not conflict
with the protections that the First Amendment provides. Absent this requirement, a plaintiff could
use the Act to turn his grievances about editorial content into a commercial Lanham Act claim.
At its core, commercial speech is speech that does no more than propose a commercial transaction.
Guided by the Supreme Court …. the Third Circuit has outlined three-factors that district courts
consider in deciding whether speech is commercial: “(1) is the speech an advertisement; (2) does
the speech refer to a specific product or service; and (3) does the speaker have an economic
motivation for the speech.” Although satisfying all three characteristics provides “strong support
for the conclusion that the speech is commercial,” the factors are not dispositive, and the inquiry
involves “making a commonsense distinction between speech proposing a commercial transaction
. . . and other varieties of speech
Of the three factors for the Court to consider, the first and third are “often interrelated” and “speak
to the overarching issue of whether this truly is commercial speech as that term has been construed
in connection with the Lanham Act.” Generally, courts consider speech that draws the public’s
attention to a product or service for purposes of promoting its sale an advertisement. Conversely,
speech that makes no refence to defendant’s product or service is not commercial speech under the
Lanham Act.
A few examples illustrate this distinction. In Facenda v. N.F.L. Films, Inc, 542 F. 3d 1016-17 (3d
Cir. 2008) the product at issue was a cable television program. The Third Circuit held that it was
commercial speech because it “focused on one product, explaining both how it works and the
source of its innovations, all in a positive tone.” In Keel v. Axelrod, 148 F. Supp. 3d 411, 419 (E.D.
PA 2015), the product at issue was a book about the defendant’s political career. The court held
that it was not commercial speech because it did “not note the availability of the political consulting
services offered by the [defendant] or [his firm],” nor did it provide any other specific information
about that firm’s consulting services. Tobinick v. Novella 848 F. 3d 935, 951(11th Cir. 2017)
considered a neurologist’s criticism in blog posts of another doctor’s off-label use of a particular
medicine. The Eleventh Circuit held that the blog posts were not commercial speech because they
“provide an objective analysis of questionable or controversial medical claims so that consumers
can make more informed decisions . . .” They did not “discuss any products for sale by the
[Defendant], and, only briefly mention his practice for context.”
A plain reading of Mr. Price’s article reveals that it does not fall within the “core notion of
commercial speech” because it does not propose a commercial transaction. The article discusses
the plausibility of Crash Proof’s claim of high-yield, risk-free returns compared to other risk-free
or low-risk investment options; opines as to the validity of Crash Proof’s claim of “no fees
attached;” and suggests what Mr. Price believes to be a more secure option for investors. In short,
the article’s purpose is to provide investment advice and to educate consumers about a product that
Mr. Price believes is “too good to be true.” Nothing in the article promotes any product or service,
so it is not an advertisement. Also, nothing in the article or the complaint suggests that Mr. Price
was trying to persuade consumers to use a service that he sells instead of Crash Proof’s product, so
he did not have an economic motive for the speech. The Court concludes that the article’s purpose
is not to “propose a commercial transaction.”
Crash Proof tries to avoid this conclusion by arguing that Mr. Price published the article for his
own economic gain, not “primarily for expressive purposes.” But the Complaint does not identify
a single product or service that the article promotes. Nor could it, because the article makes no
mention of one. Although Mr. Price describes an alternative investment strategy, he does not try
to persuade anyone to use his services, or the services of any particular firm, to implement that
strategy. Crash Proof does not even allege that Mr. Price sells competing investment services.
….Crash Proof asserts in the Complaint that Mr. Price is retired and has not sold stocks for decades.
And, by Crash Proof’s own description, the strategy is not novel or proprietary. Instead, it is “an
unoriginal . . . stock-based investment strategy.” But if the strategy is unoriginal, then the article
could not even be a veiled attempt to steer customers to a single competitor.
Nonetheless, Crash Proof claims that Mr. Price is its direct competitor because he touts a different
type of investment strategy. But all that proves is that Mr. Price and Crash Proof disagree about
how people should invest their money. Crash Proof believes in its product. Mr. Price does not.
“The mere fact that the parties may compete in the marketplace of ideas is not sufficient to invoke
the Lanham Act.” The “Lanham Act has never been applied to stifle criticism of the goods or
services of another by one, such as a consumer advocate, who is not engaged in marketing or
promoting a competitive product or service.”
To the extent that Crash Proof argues that the article is commercial speech because TheStreet paid
Mr. Price for the article, the argument is without merit. That books, newspapers, and magazines
are published and sold for profit does not prevent them from being a form of expression whose
liberty is safeguarded by the First Amendment. If a newspaper’s profit motive were determinative,
all aspects of its operations—from the selection of news stories to the choice of editorial position—
would be subject to regulation if it could be established that they were conducted with a view
toward increased sales. Such a basis for regulation clearly would be incompatible with the First
It is true, of course, that Mr. Price’s opinion mentions Crash Proof by name. It therefore satisfies
the second factor of the…test. But just mentioning a product by name does not convert protected
speech into commercial speech. Restaurant reviews, art critics, and travel websites, just to name a
few, offer sometimes critical analyses of products, by name. But if their speech is arms’-length
criticism, it does not constitute commercial speech just because it might impact someone’s business
or livelihood. Because Mr. Price’s article does not qualify as commercial speech, Crash Proof’s
Lanham Act claims fail, and the Court need not decide the truthfulness of Mr. Price’s article. The
Court will dismiss Crash Proof’s Lanham Act claims.
State Law Claims
…the Court will decline to exercise supplemental jurisdiction over the remaining state law
claims… there is no diversity of citizenship between Crash Proof and Mr. Price… Crash Proof
may refile its state law claims in the appropriate state court if it so chooses, or in this Court if it
has a basis to invoke the Court’s diversity jurisdiction.
“Humans dislike self-directed criticism. . .. The desire to suppress unpleasant or critical speech is
almost irrepressible.” Yet “[i]f liberty means anything at all, it means the right to tell people what
they do not want to hear.” Mr. Price told Crash Proof what it did not want to hear—that he thinks
it’s a scam. But as much as Mr. Price’s opinion may irritate Crash Proof, it is not illegal under the
Lanham Act because it is just that: an opinion. The Court will dismiss Crash Proof’s claims.
5G الاب
Assignment Details
Legal Environment of Bus.–9 a.m.
Submission Types
File Upload
Submission & Rubric
Please see below attached document for
assignment details and instructions.
The 2-3 page assignment must be submitted
by 8:50 a.m., Friday, Dec. 3, 2021. (It can be
submitted earlier.) It must be in Word format.
(Not pages or any other format. Any format
besides Word will receive — for the
assignment. It is your responsibility to make
certain that your document was properly
Under NO circumstances will an extension be
provided to anyone!
1101 Common Assignment instructions Crash
Proof 2021f.pdf
Submit Assignment

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